Terrace Energy Corp. (the “Company”) is pleased to provide the following operations update.
Maverick County Pearsall Project
The Company and its partner, BlackBrush Oil & Gas LP, are in the process of forming a limited partnership, BlackBrush Terrace LP, to earn a 50% operated working interest in approximately 147,000 acres, principally in Maverick County in the emerging Pearsall Shale Trend in South Texas. The first well, Chittim 1-H, was successfully drilled to a total measured depth of approximately 12,000 feet including an approximate 4,000 foot of horizontal lateral section in the Pearsall Shale. Five and one-half inch casing was successfully installed and preparations are underway to complete the well by multi-stage fracture stimulation. Fluids and equipment are presently being staged and the Company anticipates initiating completion operations before the end of the month, pending equipment availability. An additional Pearsall Shale well is scheduled to be drilled later this year.
STS Olmos Project
The first well in our STS Olmos 2013 drilling program (SP5 1-2H) was successfully drilled to a total measured depth of approximately 12,425 feet and our target objective was encountered. The well was successfully completed using “Gas Frac” technology in which a gelled hydrocarbon carrier fluid is substituted for traditional water based carrier fluids. Ten stages of “Gas Frac” were executed and the well is currently undergoing flowback testing. Test results will be announced once the well has stabilized. The completion of the SP5 1-2H will be the fourth well brought onto production on the STS Olmos project to date.
The Company plans to participate in five additional wells in 2013. Rig mobilization operations are underway in preparation for spudding the SP5 1-16H. This rig will remain in the field to drill two additional wells. A second rig is scheduled to arrive later this month to drill the final two wells (the SP5 1-17H and 1-6H). Two of the wells will also be vertical pilot holes through the base of the Olmos section to acquire extensive petrophysical and core information prior to turning the well horizontal in the Olmos. The Company anticipates completion of the 2013 drilling program late in the third quarter.
The planned 2013 program is underway. The Cutlass West A-1 was successfully completed with a 15 stage fracture stimulation treatment in the Eagle Ford Shale. The well is currently undergoing extensive flowback testing using the recently adopted limited choke approach in an effort to create a more sustainable long-term production profile. The well continues to strengthen, gaining approximately 50% increase in flowing pressure over the past 30 days. The well is currently being prepared for running production tubing later this month. Sustained results will be announced when appropriate.
The Cutlass East B-2 well and the Cutlass West B-2 have both been successfully drilled to their planned total measured depths including horizontal lateral sections in the Lower Eagle Ford Shale of 5,700 feet and 4,900 feet respectively. Five and one-half inch casing has been successfully installed. Completion operations are expected to commence in the third quarter.
Completion of the East B-2 and West B-2 wells will complete fulfillment of the Company’s obligations under the project participation agreement in order to perfect its interest in the underlying leasehold interests in the Cutlass Project. Hence the Company will earn 30% working interest in 3,395 gross mineral acres (1,018 net acres) as to all depths.
Eric Boehnke, Company CEO commented, "We are pleased with the results to date of the Company’s aggressive execution strategy. We have made significant progress on each of our major project areas and are well underway to accomplish all of our 2013 goals and objectives ahead of schedule. Results to date continue to exceed our expectations and point to continuing improvements in performance and asset value recognition. We look forward to announcing individual well results as each become available”
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